Disney's 4Q EPS Surges 38%, Blowing Past Estimates, As Studio Soars

Disney chief Bob Iger: The company has a solid 4Q and some big plans (Michael Nagle/Bloomberg)

Walt Disney closed its 2018 fiscal year with a whoop, soundly beating Wall Street’s expectations as it teeters on the cusp of finalizing its mega-purchase of 21st Century Fox.

Disney’s earnings of $1.48 a share for its fiscal fourth quarter topped the estimate of $1.34 — and surged 38% from $1.07 in the year-earlier quarter.

The company cited higher segment earnings as well as a lower effective income tax rate, fewer shares outstanding, and a benefit from a gain on a real estate sale.

Revenue of $14.3 billion also beat a $13.7 billion forecast and was up 12% from $12.8 billion the year before.

Disney shares nosed up 2% in late trading after the numbers came out.

Chairman-CEO Robert Iger said Disney is “focused on the successful completion and integration of our 21st Century Fox acquisition and the further development of our direct-to-consumer business, including the highly anticipated launch of our Disney-branded streaming service late next year.”

Just hours earlier, the company cleared a last hurdle in the $71.3 billion Fox deal when the European Commission granted provisional approval to the combination if Disney divests some television assets like A+E Television Networks and the History Channel.

The merged has already gotten a nod from U.S. regulators on the condition of a sale of Fox’s regional sports networks.

Disney is also deep in the planning stages of a new over-the-tops streaming service, called Disney+, to debut next year, that will change how viewers watch the Mouse’s content.

Disney’s studio entertainment division saw revenue surge by 50% to $2.2 billion and operating income more than double to nearly $600 million.

Disney said the increase in operating income was due to growth in theatrical distribution, lower film cost impairments and higher TV/SVOD and home entertainment distribution results.